The Narendra Moi government has made a winning statement today by announcing borrowing estimates cut by whopping Rs 70,000 crore beating the market estimates, which is likely to give a positive surprise amid the challenges.

Government will borrow Rs 2.47 lakh crore via bonds in the second half of the financial year, cutting the market borrowing by Rs 70,000 crore

The Narendra Modi government has made a winning statement today by announcing borrowing estimates cut by whopping Rs 70,000 crore beating the market estimates, which is likely to give a positive surprise amid the challenges.

Addressing a press conference on Friday, DEA Secretary Subhash Chandra Garg has said that the government will borrow Rs 2.47 lakh crore via bonds in the second half of the financial year, cutting the market borrowing by Rs 70,000 crore. The market was anticipating a borrowing of Rs 2.68 lakh crore.

Economists have welcomed the move, saying that it gives a positive signal to the market that the chances of fiscal deficit by the government are less. The government has fixed the fiscal deficit target of 3.3% for FY19.

“The borrowing is lower than what the market was expecting. A further rally can be expected on Monday,” A Prasanna, Chief Economist at I-Sec PD told CNBC-TV18. Upasana Bhardwaj, Kotak Mahindra Economist, said that the decision will comfort the market.

The government’s borrowing decision comes ahead of the Reserve Bank of India (RBI) Monetary Policy Meet (MPC) scheduled on October 4 and 5. A Reuters poll of top economists said that the RBI is going to hike rates as there is a lot of pressure on the current account deficit (CAD) from the falling rupee and rising crude oil prices.

Recently, the government also announced immediate steps to rein in CAD, including import curbs by hike customs duty on non-essential products. India’s CAD widened to 2.4% of the GDP in the first quarter of FY19, the RBI data showed.